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The Revised Schedule VI To The Companies Act, 1956. CA ANIL MOOKIM D H A N B A D. POINT OF DISCUSSION. Pre-revised schedule VI to The Co. Act,1956 Revised schedule VI to The Co. Act,1956- - main priciples changes in Balance Sheet & Profit & Loss

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The Revised Schedule VI To The Companies Act, 1956

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The revised schedule vi to the companies act 1956

The Revised Schedule VITo The Companies Act, 1956

CA ANIL MOOKIM

D H A N B A D


Point of discussion

POINT OF DISCUSSION

  • Pre-revised schedule VI to The Co. Act,1956

  • Revised schedule VI to The Co. Act,1956-- main priciples

    changes in Balance Sheet & Profit & Loss

    Format of B/S – P/L with itemwise discussion

  • Question/Answers.


Why revised schedule vi

WHY REVISED SCHEDULE VI ?

  • Financial statements of indian corporate comparable with international format.

  • To facilitate a fair portroyal of the financial and liquidity position of the company to the readers of the F/statements.

  • Harmonising and synchronising with notified accounting standards

  • Revise in terms of contents, format and to alignment with AS.

  • Applicable to all co. financial statements prepared for F.Y commencing on or after 01/04/2011.

  • Applies to all companies following indian GAAP until required to follow IFRS.


Preceding period information

preceding period information

Immediately preceding period information in financial statement with notes to a/c mandatory.

applicable from the 1st year of revised schedule vi.

Exemption : in the case of 1st year financial statements after incorporation.


Do not apply to

DO NOT APPLY TO….

  • Insurance companies

  • Banking companies

  • Any other class of companies to which separate form of balance sheet and profit and loss account has been specified.

  • APPLY TO ELECTRICITY CO.

    As because neither the Electricity Act 2003 nor the rules framed thereunder prescribe any format

    applicable to Interim financial statement also.


Main principles

MAIN PRINCIPLES

  • Compliance with the requirements of the act and/or the notified acounting standards will prevail over the schedule

  • Disclosure on the face of the finacial statements or in the notes are minimum.

  • Eliminated the concept of “SCHEDULE” and such information is now to be furnished in the notes to Accounts

  • The term used in the revised schedule vi will carry the same meaning as defined by the applicable accounting standards


Continue

CONTINUE….

  • A balance will have to be maintained between providing excessive detail and not providing important information

  • All items of assets and liablities are to be bifurcated between current and non current portions.

  • To use the same unit of measurement uniformally through out the financial statements and notes thereon


Changes related to balance sheet

CHANGES RELATED TO BALANCE SHEET

  • Prescribes only the vertical format for presentation of financial statements

  • Assets and liabilities are to be segregated into current and non-current portions

  • Shareholders holding more than 5 % shares needs to be disclosed

  • Aggregate number and class of shares allotted for consideration other than cash, bonus shares and shares brought back will need to be disclosed

  • Any debit balance in the P/L account will be disclosed under the head “Reserve and Surplus”

  • The application money not exceeding the capital offered for issuance and to the extent not refundable will be shown separately on the face of the balance sheet

  • Excess amount of subscription will be shown under “other current liabilities”


Continue1

CONTINUE…

  • Sundry Debtors replaced by the term “Trade Receivables” defined as dues arising from goods sold or services rendered in the normal course of business.

  • Separate disclosures of the trade receivables outstanding for a period exceeding six months from the date bill is due for payment. Earlier from the date bill was raised.

  • Capital advances are required to be presented under the head “Loans and Advances”

  • Tangible assets under lease are required to be separately specified under each class of asset

  • Capital commitments and other commitments are required to be disclosed. Earlier only capital commitments was required.

  • Disclosure of all defaults in repayment of loans and interest now mandatory. Earlier no disclosure was required in F/statement except was to be reported under CARO 2003.


Other additional disclosures

OTHER ADDITIONAL DISCLOSURES

  • Rights, preferences and restrictions to each class of shares

  • Terms of repayment of long term loans

  • In each class of investment, details regarding names of bodies corporate, indicating bodies are subsidiaries, associates, joint ventures or controlled special purpose entities.

  • Provision for diminution in the value of investments.

  • Stock in trade held for trading purposes, separately from other finished goods.


Changes relating to profit and loss account

CHANGES RELATING TO PROFIT AND LOSS ACCOUNT

  • The name has been changed to “STATEMENT OF PROFIT AND LOSS”

  • Statement of profit does not mention any appropriation items on its face

  • Any items of income or expense which exceeds 1% of the revenue from the operation or Rs 100000, whichever is higher, needs to be disclosed separately (earlier 1% of total revenue or 5000/-)

  • As per AS-9 Revenue Recognition, dividends should be recognised as income only when the rights to receive dividends is estlablished as on the balance sheet date

  • Companies other than finance companies, revenue from operations need to be disclosed separately as revenue from sale of products, sale of services, and another operating revenues

  • Interest cost needs to be disclosed separately as finance cost.


The revised schedule vi to the companies act 1956

  • Schedule No. changed to Note No.

  • Rounding off not compulsory .

  • Option to present figures in lakhs , millions, crores which did not exist earlier.


Disclosures no longer required

DISCLOSURES NO LONGERREQUIRED

  • Managerial remuneration and computation of net profits for calculation of commission.

  • Quantitative information relating to turnover, raw material & purchases

  • Information relating to licenced/installed capacity and actual production.

  • Investments purchased and sold during the year.

  • Investment, s/debtors and loans & advances from co. under the same management.

  • Max. amt. due on a/c of loans & adv. From directors / officers of the co.

  • Commission , brokerage and non-trade discounts.


Journey of schedule vi ends

JOURNEY OF SCHEDULE VI ENDS

THANKS A LOT FOR PATIENT HEARING

CA A.K.MOOKIM

DHANBAD


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